Back in the heyday of the Bitterroot Valley’s housing boom, Bitterroot Valley appraiser Darwin Ernst said one local mortgage broker used to say: “You show us the house; we’ll show you the money.”

Real estate fraud was more common than people realize, Ernst said.

“In some cases, people just didn’t know,” he said.

During the housing boom, the valley had about 10 unlicensed mortgage brokers. Today, two licensed brokers remain in business.

Inflated home prices, creative financing, and misrepresentations on loan documents weren’t issues that just happened somewhere else in the country, Ernst said.

New regulatory requirements that followed the housing market bust has changed the way people do business.

A two-day seminar on real estate fraud coming to Hamilton Monday is designed to help real estate agents, appraisers and lenders avoid the pitfalls of becoming an unsuspecting participant in mortgage fraud, Ernst said.

The seminar is hosted by the Bitterroot Valley Board of Realtors. It will be held at the Bitterroot River Inn on Monday and Tuesday, Nov. 18 and 19.

The first day focuses entirely on the kind of scams that can occur in real estate transactions and how to avoid them.

The second day is set aside for appraisers to consider issues of adjustments, independence and mandatory reporting requirements.

Anyone interested in attending the seminar can call the Bitterroot Valley Board of Realtors at 363-2000 to register.

The same seminar attracted nearly 200 in Missoula last month.

Ernst spent close to a year helping to design the course, which focuses on issues specific to Montana’s real estate market.

The course will examine 20 common frauds that occur during the purchase and financing of real estate transactions.

Nationally known fraud profiler Richard Hager will teach the course.

Hager will examine several actual real estate and mortgage fraud cases. He will point out the failures of the sellers, buyers, real estate agents, appraisers, mortgage loan originators and lenders.

And he’ll explain how their actions violated state and federal laws.

“On a daily basis, real estate professionals violate numerous laws, often without knowing it,” Hager said in a press release. “The course is designed to provide the basic education for real estate agents, appraisers and loan originators, attorneys and consumers regarding real estate fraud, ethics and the law.”

Ernst said the very same pressures that led to widespread fraud in the housing market that helped collapse the country’s economy is already beginning to well up again in some markets.

“We are seeing rapid 10 to 15 percent increases in the housing market in some major cities,” he said.

Those rapid increases and the potential for making lots of money can drive people to commit fraud.

“A person shouldn’t get into a house that they can’t afford,” he said. “We don’t want to see any more foreclosures. ... These classes are designed to help people fix the problem so it doesn’t happen again.”

Layna Lyons, executive officer for the Bitterroot Valley Board of Realtors, said everyone is invited to attend the course, which will offer education credits for Realtors and appraisers.

“It should be a good course,” she said. “This is the first time that we’ve ever offered classes for Realtors and appraisers for credit.”

With the new regulations that followed the national economic downturn, Lyons said it’s important that people understand the potential for fraud.

“People can get into a problem and not even realize they are doing something wrong,” she said. “I think this is going to be a great class for a lot of different people. We want everyone to know what fraud is.”